Iranian government risks alienating support base in suppressing disparate protests across country

Iranians take to the streets to protest over a wide range of grievances against the government

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These protests appear leaderless, disorganised and heterogeneous in their composition, grievances, and geographical location. A sample of videos posted on social media indicates that the protests are variously targeted at economic mismanagement; rising food and fuel prices; corruption, particularly by the clergy; government ‘deceit’; and the Islamic Republic’s commitment of scarce resources to intervention in regional conflicts, instead of internal investment. In some cases protests have challenged the principle of clerical governance central to the Islamic Republic.

Protests began in Iran’s second largest city of Mashhad on 28 December and spread to dozens of cities across the country, with protests affecting nearly all of Iran’s provinces. IHS Markit cannot independently verify the scale of the protests, but they appear to be in the hundreds, based on video footage shared on social media. Official media has so far reported 21 dead, including six who allegedly attacked a police station in Isfahan province, and one member of the IRGC. Police have arrested at least 450 in Tehran, with hundreds more arrested in other cities.

What’s different?

This round of protests is the third popular challenge to the Islamic Republic since the 1979 Revolution. Despite a split in its leadership in 2009, the Islamic Republic succeeded in suppressing the threat posed both by student protests in 1999 and widespread reformist protests disputing the 2009 presidential election results, primarily by the overwhelming use of force and arrest of protest leaders. The current unrest, however, differs in three major ways. First, unlike 1999 and 2009, it appears to be driven by Iran’s urban poor and working-class, a core constituency for Iran’s dominant conservative faction and the vanguards of Iran’s 1979 revolution against the Shah monarchy. Tellingly, the IRGC and the paramilitary Basij force (which primarily recruits from Iran’s poor and working-class and is typically used to support the IRGC and enforce public order in the event of unrest) have been relatively muted, and have not yet been deployed on the streets, leaving public order enforcement to the police. IHS Markit assesses that this probably reflects concern by the leadership of IRGC and Basij over the risk of defections or disobedience.

Second, this wave of protests is largely and notably leaderless and is making no specific or well-defined demands, making the state’s past dual strategy of targeting the leadership for repression, while granting limited concessions, more difficult. Finally, even if at least elements of the government have the political will to address the protesters’ grievances, this would require major structural economic reforms to improve government efficiency and transparency, and reduce unemployment. All of these reforms would require Supreme Leader Ali Khamenei and the IRGC to accept significant restrictions on their economic influence, at the expense of their extensive commercial interests and ultimately their political power.

Leadership crisis

IHS Markit previously assessed that corruption allegations exchanged between members of the elite were likely to embolden Iran’s urban poor and raise the risk of economically-motivated protests (see Iran: 21 December 2016: Elite political infighting and corruption allegations risk intensifying economically motivated protests across Iran in poor urban centres). The current unrest comes after days-long tit-for-tat corruption allegations between former hard-line president Mahmoud Ahmadinejad and hard-line Judiciary Chief Sadeq Larijani in mid-December 2017. Divisions within the conservative faction on response to the 2009 protests resulted in a split, with the “radical” Ahmadinejad faction being purged from the establishment from 2013. Ahmadinejad, however, has since demonstrated his opposition to Khamenei, including by running for the 2017 presidential election in defiance of Khamenei, and has threatened to reveal the corruption of the political elite.

The public has likely lost its trust in the ability of centrist President Hassan Rouhani to deliver on its expectations of economic benefits following sanctions relief resulting from the nuclear agreement (see Iran: 28 January 2016: Despite sanctions relief, Iran’s high operational risks are likely to impede major foreign investment inflow in one-year outlook). The intra-elite conflict and the ineffectiveness of the clerical leadership have both likely contributed to the growing sense that the Islamic Republic is unable to deliver on its promises.

Divided government response

Differences in government messaging reflect internal divisions within the Islamic Republic over management of the protests. The Rouhani administration has sought to calm protesters by acknowledging their constitutional right to peaceful protests, but condemning rioters. Khamenei, however, has blamed ‘enemies’, referring to the US, Israel, and Saudi Arabia, for provoking the protests. The relatively low number of casualties, the reported widespread police use of non-lethal anti-riot measures, including water cannon, suggest that the state is seeking to retain the use of lethal force as a last resort, avoiding the risk of creating protest ‘martyrs’. Nevertheless, there is a high risk of further casualties, and of the creation of a spiral of violence, as protesters increasingly resort to violence and rioting, and the government resorts to deployment of the Basij and more severe measures.

Outlook and implications

If the protests do not fizzle out in coming days, the government will increasingly be pressured by its hardliners to resort to the use of force to eliminate further protests. More widespread use of lethal force is likely to further deepen divisions in Iran’s political establishment and increase the opportunity and pressure for external actors to intervene. The US would be likely to impose sanctions on individual Iranian officials and their assets for human rights abuses. The US administration might well calculate that this would improve US prospects in gaining European and Asian support in confronting Iran’s regional policies and ballistic missile programme, including by reducing their economic relations with Iran, which would indirectly threaten the longevity of Iran nuclear agreement (Joint Comprehensive Plan of Action – JCPOA).

Although the Trump administration is likely divided on its strategy for improving what it perceives as deficiencies within the JCPOA, a heavy-handed Iranian response to the protests would probably strengthen the advocates of stronger US sanctions on Iran, including a potential refusal to renew Iran’s nuclear sanctions waivers in mid-January. Failure to sign those sanctions waivers would constitute a US withdrawal from the JCPOA, increasing the risk of its collapse (see Iran: 27 October 2017: Congressional action on nuclear agreement ‘decertification’ likely to create political space for Trump to preserve JCPOA). For their part, Iran’s main regional adversaries of Saudi Arabia and Israel, and probably even Turkey, would likely see prolonged protests and Iranian government use of repressive measures as an opportunity to weaken Iran internally and distract it from consolidating its regional gains by supporting opposition movements, including ethnic – especially Arab and Kurdish – separatist movements, by covert supply of small-arms and funds. This in turn would risk escalation of interstate and civil war risks, involving the Saudi-led Gulf Arab bloc and Israel against Iran and its regional proxies.

Internally, if Ahmadinejad emerged as a rallying leader for the protests, this would strengthen the protests and likely further heighten the risk of divisions and defections within the IRGC and Basij. Should Rouhani succeed in curbing the protests by a combination of economic concessions and targeted arrests, this would significantly increase his prospect of succeeding Supreme Leader Ali Khamenei when he dies or leaves office (see Iran: 13 August 2015: Iran: Scenarios for Supreme Leader’s succession). Nevertheless, Rouhani would likely be unable to implement the kind of economic changes that would lead to widespread improvement in living conditions, indicating that there will be a residual increased risk of potentially destabilising protests for the foreseeable future.